Need input. Elderly parents found a "Time Savings Certificate"

[glinda]

in their mountain of paper. I have been attempting to help sort out their finances since they are too old (and below poverty level) and can no longer deal with all of this.
The bank is no longer in existence but after three days searching, I located the Bank that bought up their old bank. Located a person at the Bank that I spoke with. Was able to verify that that social security number on the certificate was listed on her records. (they said they moved their money but maybe not this money????) Don't know what that means exactly. But told her I wanted to save them time and energy because of their age and I wondered if that meant they had money there. She said she could not answer that but wanted them to call her direct line. She sounded happy. (????)
Firstly, it says they made a deposit of a certain amount back in 78 at a rate of 7.250. It also says it cannot be cashed for four years. It is not cashed nor stamped nor signed on the back at all so appears to be something that never was dealt with? I mean.... if not signed or anything... isn't it basically something that might have grown? It is compounded and quarterly "checked" on the certificate also.
I do not know how my parents could have forgotten this as they do not remember making such a deposit but that is what it appears to be. And unsigned/ un-cashed. They had closed their account years ago but yet the Bank that bought up their old Bank has something listed under my mom's number.
What do I need to know about this stuffs as they are calling the Bank Monday to ask about it. I am financially ignorant in regards to such matters.
Guess I should be getting power of attorney soon also, huh?

[A HERETIC I AM]

1. It's basically a CD....

or at least sounds like one.

Even though it has been 32 years, there is no guarantee the original deposit has been earning 7.25% all these years. It could have gone down or it could have gone up considerably for a period of time. It depends on whether or not the bank continued to roll it into a new CD at their current rate each time it matured. Since you state it was a 4 year note, it is possible that the bank automatically renewed it every four years since 1978.

"What do I need to know about this stuffs as they are calling the Bank Monday to ask about it."

You need to ask if the account valid and if it is, is it currently held in a Certificate of Deposit or some other "Time" deposit, as opposed to a "Demand" deposit account like a checking or savings account.

If it is held in a time deposit account (a CD) then you want to know when the CD matures. "On what date will the CD Mature?" is a question to ask.

If it is in a CD and your parents need the money (or part of it) right away, you want to find out what the penalties are, if any, to "surrender" the CD. "Are there any penalties or fees due if a withdrawal is taken now?" is another question to ask.

DO NOT BE AFRAID TO ASK QUESTIONS!!! Do not be intimidated by the process. Make sure you completely understand what any bank manager or financial person tells you.

If you go with your parents to the bank, making sure they have a birth certificate with them as well as their social security cards will be a big help. Take as much identifying documentation as you think you might need, but usually two photo ID's (Drivers Licenses and Passports are perfect) and perhaps an electric bill and a bank statement are all that is really needed to prove they are who they say they are. That also shows that they have business relationships established in their area.

Getting Power of Attorney will absolutely be needed if you are going to be the primary person to look after their finances. It will allow you to act on their behalf, just as if your mom or dad were sitting with you when attending to these sorts of affairs.

BTW, if they simply deposited $1,000 back in 1978 and it averaged just 6% per year, it would be around $6500.00 now. If it was $10,000 and they were able to average 7% (and CD rates got pretty high for a while back then) every year, that ten grand would be over $87,000 now.

Best of luck.

[elleng]

2. Great answer, and best of luck to all.

[glinda]

3. Thanks! One more question...

"You need to ask if the account valid and if it is, is it currently held in a Certificate of Deposit or some other "Time" deposit, as opposed to a "Demand" deposit account like a checking or savings account."
__________________________________
Why would the account not be valid? And what is a Demand deposit? They remember closing out their account but this is like a Receipt" looking check like thing that has a place on the back that one signs to take their money out. It says they had to wait 48 months before withdrawing but I would think it would have had to be turned in and signed????? I am soooo stupid.

I live nearly 2 hours away and I know my folks are going to have a hard time dealing with this. Do you think it is a good idea to see if we can do a three way on the phone? Or maybe that they just call and ask basically if something is there and then we go down and meet with the banker if there is something there? Crap. Life is getting so complicated with them.

I appreciate all of your help on this.

[A HERETIC I AM]

4. Hope this clears up your questions for you...

Why would the account not be valid?

The primary reason I think it is possible the account is no longer valid would be because fees have eaten up the principal. If the original deposit was small, say $1000 or less and the bank did not roll the money into a new CD after the 1st four year note, then the cash was likely deposited in a demand deposit account. Many demand deposit accounts have quarterly or annual fees and if there is no activity (money added, for instance), over time these fees could have completely chipped away at the principal amount. It is also possible that if the bank lost all contact with your parents then they would classify the account as abandoned and simply close it and keep the money. I think the latter is unlikely unless it was a really small amount to begin with. Did your parents receive regular statements on this account? It is highly unlikely that the bank would not have sent them any correspondence at all over the years. They would have at least gotten an annual statement.

And what is a Demand deposit?

A demand deposit account is pretty much like it sounds; The money is available "on demand", in other words, there are no limitations on how much of the balance you can access at any time. Checking accounts are Demand deposit accounts. So are most regular savings accounts. CD's and certain other interest bearing accounts are "Time deposit" accounts, meaning they come with an agreement at the beginning that says the deposit will be left with the bank for a specific period of time (like a CD) and that access to the money before the maturity date will result in penalties.

They remember closing out their account but this is like a Receipt" looking check like thing that has a place on the back that one signs to take their money out.

If they indeed closed the account, meaning they waited the four years (or however long) and then took the entire principal and interest payments and left the bank with it, then the account is no longer valid. There is nothing there. That is what you need to find out for sure. Is there any money in that bank under your parents name.

It says they had to wait 48 months before withdrawing but I would think it would have had to be turned in and signed????? I am soooo stupid.

You're not stupid. Again, it is important to know whether or not they did indeed close the account way back when. The fact that you have that piece of paper with no signature is not proof the account is still valid. They may have gotten several of those slips when they opened the account. This proves the value of keeping records orderly and using a shredder when needed!

I live nearly 2 hours away and I know my folks are going to have a hard time dealing with this. Do you think it is a good idea to see if we can do a three way on the phone?

Yes. If you can conference call the bank with either your mom or dad (or both) on the phone with one of the managers at the bank, that would be fine. The bank should be more than willing to speak with you as long as they hear your mom or dad say it is alright for you to be a part of the conversation.

Or maybe that they just call and ask basically if something is there and then we go down and meet with the banker if there is something there?

Are both your parents still in control of their mental faculties? If so, then sure, they can make the call, find out if the account is valid, what the balance is and then you can go from there. If they are getting forgetful and you are worried they might not ask the right questions, try and do the conference call.

Crap. Life is getting so complicated with them.

It doesn't get any easier, either. Trust me. My mom is 82 years old and while she is still pretty sharp, she gets confused on financial matters and just leaves the larger questions to me. She can still balance her checkbook and all that OK, but some things she needs help with and as time goes on, I'm sure those things will increase.

Ya gotta love em'. They love you! Not to mention changed your dirty drawers when you were still pooping yourself!!!

Hope that helps.

[glinda]

5. They do not remember regular statements but they are now pretty much

unable to deal with complicated things. My dad never did the finances and my mom had a heart attack. Her back makes her on pain pills now (even though I got her to seek acupuncture). It is a total mess.
My mother keeps everything. She used to be the community org. secretary so she is totally a nut about those things. But this is something I do not see so far that there is any copy of. Am still going through files.
Dad thinks they closed their account back in the 80's maybe. When I asked the woman who deals with certificates, she said there was no way to check if they had an account there unless I had a SS#. I did. I gave it to her. She saw it on her computer search. She gave me her direct line number for my parents to call her. She said she could not release any info to me. That was fine. I just told her I didn't want them wasting energy on nothing. She said have them call her. hmmmmmmm.
Could be as you say nothing. But they closed their regular account out years ago so don't know why they would have a SS# still.
My dad thinks it is nothing and maybe so. Then again, they need to ask.
I asked my dad to have the woman do a three way on the phone with all of us. That way I can hear what she says to them.
I really appreciate everything you have told me so far. Keep your fingers crossed for us. Will let you know. Trying to not get my hopes up.

[A HERETIC I AM]

6. You know what? You never know.

I know for a fact that there are a lot of old, forgotten accounts of all types in all sorts of financial institutions in this country. Plenty of accounts coded as "abandoned" as well.

I shall keep my fingers crossed for you and your parents and here's hoping an unexpected windfall is headed their way!

All the best,

Paul

[glinda]

7. will let you know what happens

[glinda]

8. Woot!!!!!!!!!!!!!!!!! Jackpot! Well sort of. There is quite a bit of money there but

what is unfortunate is my mother wants to put it toward funeral expenses. 4 pete's sake.
They need a bathroom downstairs in order to stay in their home. My father sounds like he has pneumonia now from taking car of her. Today he had to drag her all over to the Banks because she would not call the person I spoke to. Geeze!!!!!!!!!!!
I need to have power of attorney and she is going to fight me on this.

[elleng]

9. Do your best! Fingers crossed.

:hi:

[A HERETIC I AM]

10. Well good!!! Excellent!

Glad to hear it was a valid account.

[elleng]

11. Suggestion:

Find out something about funeral expenses. Is either of them a veteran? Can be quite inexpensive.

Again, good luck.

[glinda]

12. Yes. Father is and wants to be buried that way but mother is nut religious since

the extreme right had sent her books and flyers in her mail lately about Armageddon and such. It has in some ways tipped her over the edge. My father is concerned about strange religious prayer organizations she keeps giving money to. This is one reason that I need to do an intervention. But basically she is partially sane.
My dad wants to pay for a bathroom and my mother wants control but she is not "right in the head". I want to get power of attorney before she is totally off her rocker. : >)

[glinda]

13. Also the Bank is checking into why they didn't get statements but said the

money is there for sure.

[elleng]

14. Breathing for you (and the miners!) glinda!

[glinda]

15. Thanks! I am just so happy for them because they can use money.

Just hope I can help prevent my mother from spending it in a non-constructive way.

[glinda]

16. Ok. So now the Bank has not been sending them notices as to when they can withdraw. They

are looking into why my folks never got anything in the mail. They are sure that the money is in there though.
My husband says he has a couple and doesn't get notices but for some reason the "Bank cannot understand why my folks did not get any notices". Now they found another one too!!!!!!!!!!!!!!
So my question is, since they would have to wait until 2014 to not get a penalty.... and I do not think the chances are great that they would be around or could enjoy using the money.... what sort of penalties would they get for removing the money now???????????
I think the Bank should negotiate with the penalties since they have left my parents in the dark for about 32 years.
I have now realized that my mother has squirreled away money for years and my poor father has always worried about money. Geeeeze!

[A HERETIC I AM]

17. Assuming the money is indeed in a CD....

The penalty for taking a withdrawal before the CD matures is usually a certain amount of the interest to be paid.

Example:

You put $1000.00 into a 5 year CD that pays 5% per year. That amounts to $50.00 in interest per year. If you wanted to surrender the CD after only one year, MOST banks charge no more than 6 months of interest, maybe one years worth, so in my hypothetical the charge would be $25.00 and perhaps as high as $50.00.

You would still be ahead by $25.00 or in the worst case, simply get your grand back.

You need to ask the bank exactly what the penalty will be. The longer the note, the higher the possible penalty. I honestly don't think the penalty would be so high as to actually eat into the principal. Either way, your parents are way ahead of where they started, so giving up a little potential interest payments at this point shouldn't trouble them too much.

[glinda]

18. Thanks. I really do not understand why they failed to notify my folks on the money that had

accumulated.

[marybourg]

19. Google ""unclaimed funds" & your parent's state. Most have searchable data bases. You very

well may find your parent's money there. In most states banks have to pass unclaimed funds to the state.

[glinda]

20. Update

Well it was Stocks (some of it and others were CDs) and we sold them and they built a bathroom on the main floor of their two story house so my mom can avoid a nursing home for now. It was completed last week.
This got my father into action visiting his two Banks and he watches the dates to when he can cash his CDs. It is a miracle that in these times of hardship financially, that my mother was able to put money away without my father knowing about it. She had no clue anything would be worth anything!
It is sad that today we can't seem to do that as easily.

[A HERETIC I AM]

21. That's great news! Good for them!

Hope they both enjoy the bathroom (not too girly for your dad!!).

I'm happy for you and your parents.

[glinda]

22. Cannot believe how many hits this post has gotten. I you have elderly parents, please

volunteer to file and sort their paperwork. You might find that they have things such as this.
We found two items that returned money to my elderly parents.